Dotting the I’s and crossing the T’s of estate planning

Doug Horn

Estate Planning has been the topic of many of my weekly articles. Whether it is high on the priority list or not, the financial impact of a missing or out-of-date estate plan can be considerable. Just because an estate plan was completed within the last several years does not mean issues do not surround the plan.

Generally, one of the last items discussed by the attorneys is to properly title the assets. Most likely, all of the real estate deeds were handled by the attorney, since the language on these documents needs to be precise. But what about the savings accounts, checking accounts, investment accounts, actual stock or bond certificates, insurance policies, retirement accounts, car titles…and the list could go on. It is wonderful to have an updated Will or Trust and all of the current desires properly reflected within the document. But what if this newly drafted document ends up doing little or nothing of what was instructed when written? You might ask, “How could that be possible?”

The answer is in the last set of instructions from the attorney. Making sure all of the assets are properly titled so the documents so meticulously written do what they were intended. For the estate plan to work, the documents must control the assets. Sounds easy, but it is also very easy to miss this one. As an example, a couple is updating their plan. They are both married for the second time and they each have two children from a first marriage. They each would like to take care of one another and then have their assets pass to their own children upon the death of the surviving spouse. They each create a Will leaving in trust their assets with instructions the income and principle if needed to support the surviving spouse. Upon the death of the surviving spouse, the assets can then go in equal shares to their two children.

Sounds straight forward, but what if they forgot the last set of instructions from their attorney. During their marriage, the husband had added his wife’s name to the account for ease of management. While the best option would be to sign a financial power of attorney, adding someone’s name to an account can clearly create issues. The type of problems will depend upon how it is now titled, tenants in common or joint tenants with rights of survivorship. In either case, the likelihood of all of his assets getting into the trust for the benefit of his spouse and ultimately benefiting his children is in serious doubt.

It is very common for a parent to request one of the children to be added to the parent’s checking and sometimes investment accounts. Generally, this is done with the intent for ease of management and not to change the estate plan. However, in my personal experience if the account is a checking account, the child is usually added as a joint owner, and in my cases, with rights of survivorship. This type of ownership now causes all of the assets in this particular account to become the child’s assets upon the death of the parent, even if the estate plan instructs all accounts to be split among all of the children. To avoid this, a financial power of attorney could be used, or when added to the account, the child could be added as an agent and not an owner.

Taking time to verify how each account is owned (titled) may not be a very fun project, but it could be one that allows you to correct potential estate transfer errors before they occur.

For assistance with insurance, estate planning, and managing investments, contact me at Quality Financial Concepts or one of the other Certified Financial Planners in our area. To continue a personal quest for education, you can also view our learning center on our website, There you will find articles on a variety of topics, on-line seminars, calculators, as well as a host of other free tools.

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